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By Pat in Denver, CO on 10/25/2006
Let me say first of all, I've lurked around here for a while reading all the great information on here. As an industry professional, I can say I have learned a lot about the building process from your perspective: as the owner-builder. So, thank you!
I've read lots of questions on here about budgeting, what to pay per square foot, how to budget effectively, etc. Honestly, budgeting for construction is one of the hardest parts of building. On one hand, you are trying to save money, but on the other, want a functional home. Many times, people under-budget for construction to afford the project, only to find half way through construction they want to upgrade to engineered wood floors, travertine tile, and granite countertops. The result is running short on funds, stress, and a scramble to pay the bills.
One of the best things to do heading into a project is to explore your ultimate goal. If it is to build a house and sell it for profit, go for the cheapest bids and materials you can. But if you are on this forum, you are here because you are trying to build a dream home for you and your family. So, what are your goals? By this I mean, would you like the emphasis of your home to be on function or design? Elaborate designs (steep roof pitches, number of house corners, levels, etc) all drive cost. Sure, they may look beautiful, but these design cues will affect material pricing and subcontractor bids. On the flip side, a box shaped home will be simple to build (relatively inexpensive) but may not provide the "look" you are after. Only you can answer the question of what is truly important, but remember it affects a series of trades and pricing.
Another key ingredient in budgeting is counting the small stuff. Everyone knows they need to budget for the major phases of construction and materials, but they forget about utility connection fees, temporary facilities, finished stairs and handrails, and the cost of finish carpentry. These few examples can represents thousands of dollars in additional costs - which your lender may or may not bring to your attention. The small stuff really matters!
I'd love to ramble on and on about this stuff, but I wanted to highlight a few of the budgeting techniques I've come across in my experience.